summary en - global employment trends for youth 2013 - a generation at risk

7/27/2019 Summary en - Global Employment Trends for Youth 2013 - A Generation at Risk

1/11

GLOBAL EMPLOYMENT

TRENDS FOR YOUTH 2013

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+1.0075230.887984 +1.987523006.64 0.887985

+1.997523006.65 0.887986 +1.984523006.66

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+1.987521006.65 0.-887987 +1.987523006.65

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-0.883988 +1.987523006.63 -006.65 0.894989

+1.987523006.65 0.887990

A generation at risk

Executi

vesumm

ary


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GLOBALEMPLOYMENTTRENDSFORYOUTH2013

Ageneration

at

risk

Executivesummary

International Labour Office, Geneva


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ii

Copyright International Labour Organization 2013

First published 2013

Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal

Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization,

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in accordance with the licences issued to them for this purpose. Visit www.ifrro.org to find the

reproduction rights organization in your country.

Global Employment Trends for Youth 2013: A generation at risk / International Labour Office Geneva:

ILO, 2013

ISBN 9789221274834 (print)

ISBN 9789221274841 (web pdf)

International Labour Office

Youth employment / youth unemployment / skills mismatch / youth / economic recession / developed

countries / developing countries

13.01.3

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or by email: [email protected]

Visit our website: www.ilo.org/publns

Printed in Switzerland


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1. Introduction

1.1 Overview

It

is

not

easy

to

be

young

in

the

labour

market

today.

The weakening of the global recovery in 2012 and 2013 has further aggravated theyouth jobs crisis and the queues for available jobs have become longer and longer forsome unfortunate young jobseekers. So long, in fact, that many youth are giving up onthe job search. The prolonged jobs crisis also forces the current generation of youth tobe less selective about the type of job they are prepared to accept, a tendency that wasalready evident before the crisis. Increasing numbers of youth are now turning toavailable parttime jobs or find themselves stuck in temporary employment. Securejobs, which were once the norm for previous generations at least in the advancedeconomies have become less easily accessible for todays youth.

The global youth unemployment rate, estimated at 12.6 per cent in 2013, is close to itscrisis peak. 73 million young people are estimated to be unemployed in 2013. 1 At thesame time, informal employment among young people remains pervasive andtransitions to decent work are slow and difficult.

The economic and social costs of unemployment, longterm unemployment,discouragement and widespread lowquality jobs for young people continue to rise andundermine economies growth potential.

Skillsmismatchisaddingtotheyouthemploymentcrisis.

Skills mismatch on youth labour markets has become a persistent and growing trend.Overeducation and overskilling coexist with undereducation and underskilling, andincreasingly with skills obsolescence brought about by longterm unemployment.

Such a mismatch makes solutions to the youth employment crisis more difficult to findand more time consuming to implement. Moreover, to the extent that young people inemployment are actually overqualified for the job they are doing, society is losing theirvaluable skills and forfeiting stronger productivity growth that would have beenachieved had these young people been employed at their appropriate level of

qualification.

Indevelopingregionswhere90percentoftheglobalyouthpopulationlives,stable,

qualityemploymentisespeciallylacking.

Developing regions face major challenges regarding the quality of available work foryoung people. This report confirms that in developing economies where labour marketinstitutions, including social protection, are weak, large numbers of young peoplecontinue to face a future of irregular employment and informality. Young workers oftenreceive below average wages and are engaged in work for which they are eitheroverqualified or underqualified. As much as twothirds of the young population is

1 Unless otherwise specified, figures in this chapter refer to youth aged 1524.


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underutilized in some developing economies, meaning they are unemployed, inirregular employment, most likely in the informal sector, or neither in the labour forcenor in education or training.

Inadvancedeconomieslong-termunemploymenthasarrivedasanunexpectedtax

onthe

current

generation

of

youth.

Youth unemployment and its scarring effects are particularly prevalent in three regions:Developed Economies and European Union, the Middle East and North Africa. In theseregions youth unemployment rates have continued to soar since 2008. Youthunemployment increased by as much as 24.9 per cent in the Developed Economies andEuropean Union between 2008 and 2012, and the youth unemployment rate was at adecadeslong high of 18.1 per cent in 2012. On current projections, the youthunemployment rate in the Developed Economies and European Union will not dropbelow 17 per cent before 2016.

As was discussed in the 2010 edition ofGlobalEmploymentTrendsforYouth,there is aprice to be paid for entering the labour market during hard economic times. Much hasbeen learned about scarring in terms of future earning power and labour markettransition paths (ILO, 2010a). Perhaps the most important scarring is in terms of thecurrent youth generations distrust in the socioeconomic and political systems. Some ofthis distrust has been expressed in political protests such as antiausterity movementsin Greece and Spain.

Creativeandwide-rangingpolicysolutionsareneeded.

Improving youth labour market outcomes requires an indepth understanding ofemployment and labour market issues that are country specific. Analysis of youthlabour markets, with particular emphasis on the issues that characterize youthtransitions to decent work, is crucial for determining countryspecific needs and forshaping policies and programmatic interventions.

A global movement framed by the ILOs Call for Action (as outlined in Chapter 6) isrequired to break the vicious circle that keeps so many millions of youth out ofeducation and stuck in nonproductive employment and poverty.

1.2 Organizationofthereport

This issue ofGlobalEmploymentTrendsforYouth provides an update on youth labourmarkets around the world, focusing both on the continuing labour market crisis and onstructural issues in youth labour markets.2

Chapter 2 sets the stage with an overview of youth labour markets at the global andregional levels. Chapter 3 focuses on the skills mismatch in advanced economies. Thechapter examines recent trends and identifies groups that are more vulnerable tomismatch, which include youth in general and young women in particular. Chapter 4

2 Previous editions of the GlobalEmploymentTrendsforYouth (2004, 2006, 2008, 2010, 2011 and 2012)are available from the ILOs website atwww.ilo.org/trends.


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turns attention to the situation facing youth in developing regions where labour isabundant, capital is scarce and a stark duality exists between the shrinking but stilldominant traditional economy and the modern economy. The chapter proposes amodel for greater disaggregation of traditional indicators, using data from the results ofthe schooltowork transition surveys undertaken as part of the Work4Youth

partnership between the International Labour Office and The MasterCard Foundation.

Chapter 5 continues the examination of youth labour markets in developing economies,using the newly available microdata, but focusing on the topic of labour markettransitions. New data on paths and duration of transition offer a unique insight into howyoung people transition from the end of schooling (or first entry into economic activity)to a stable job in the labour market or alternatively, remain stuck in less productive andless beneficial categories of economic activity such as unemployment or selfdefinednonsatisfactory selfemployment. Chapter 6 closes with an overview of policy options,which build on the findings in this report as well as recent recommendations made bythe ILO in various international meetings.

1.3 Mainfindings

This is a dense report, packed with data and information. The following summary aimsat assisting readers to grasp the main findings and updates in youth labour markettrends.

1.3.1 Globaltrends(Chapter2)

The global youth unemployment rate, which had decreased from 12.7 per cent in 2009

to 12.3 per cent in 2011, increased again to 12.4 per cent in 2012, and has continued togrow to 12.6 per cent in 2013. This is 1.1 percentage points above the precrisis level in2007 (11.5 per cent).

By 2018 the global youth unemployment rate is projected to rise to 12.8 per cent, withgrowing regional disparities, as expected improvements in advanced economies will beoffset by increases in youth unemployment in other regions, mainly in Asia.

Global youth unemployment is estimated to stand at 73.4 million in 2013, an increase of3.5 million since 2007 and 0.8 million above the level in 2011. Rising youthunemployment and falling labour force participation contributed to a decrease in theglobal youth employmenttopopulation ratio to 42.3 per cent in 2013, compared with44.8 per cent in 2007. Part of this decrease is due to rising enrolment in education. Theglobal youth employmenttopopulation ratio is projected to be 41.4 per cent in 2018.

Globally, the ratio of youth to adult unemployment rates hardly changed in recent years,and stands at 2.7 in 2013. Young people therefore continue to be almost three timesmore likely than adults to be unemployed, and the upward trend in globalunemployment continues to hit them strongly.

The global employmenttopopulation ratio declined by 1 percentage point between

2007 and 2012. This was due to falling labour force participation and risingunemployment, while changes in the demographic structure helped to raise the


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employmenttopopulation ratio. The contribution of youth unemployment to thedecline in the employmenttopopulation ratio was particularly pronounced in theDeveloped Economies and European Union and in East Asia.

1.3.2 Trendsinadvancedeconomies(Chapter2)

Since 2009, little progress has been made in reducing youth unemployment in theDeveloped Economies and European Union as a whole. The youth unemployment rate in2012 is estimated at 18.1 per cent, the same rate as in 2010 and the highest level in thisregion in the past two decades. If the 3.1 per cent discouragement rate is taken intoaccount, the discouragementadjusted youth unemployment rate becomes 21.2 percent. The youth unemployment rate is projected to remain above 17 per cent until 2015,and decrease to 15.9 per cent by 2018.

Between 2008 and 2012, the number of unemployed young people increased by morethan 2 million in advanced economies, growing by almost 25 per cent. In the secondquarter of 2012 the youth unemployment rate exceeded 15 per cent in two thirds ofadvanced countries. However, there are significant variations across countries andsome countries are showing positive results. The youth unemployment rate was below10 per cent in six countries in the Developed Economies and the European Union in thesecond quarter of 2012, and in three countries, youth unemployment rates are currentlybelow the level in the same quarter of 2008 (Germany, Israel and Switzerland).

From 2008 to 2010, the proportion of young people not in employment, education ortraining in the youth population, the NEET rate, increased by 2.1 percentage points toreach 15.8 per cent as an average of OECD countries. This means one in six young

people were without a job and not in education or training.

The youth unemployment crisis in advanced economies is also reflected in longer jobsearch periods and lower job quality. In the majority of OECD countries, onethird ormore of young jobseekers are unemployed for at least 6 months.

In Europe, an increasing proportion of employed youth are involved in nonstandardjobs, including temporary employment and parttime work, and evidence shows that asignificant part of the increase is involuntary rather than by choice. Youth parttimeemployment as a share of total youth employment in Europe was 25.0 per cent in 2011.Another 40.5 per cent of employed youth in the region worked on temporary contracts.

1.3.3 Trendsindevelopingregions(Chapter2)

Regional youth unemployment rates show large variations. In 2012, youthunemployment rates were highest in the Middle East and North Africa, at 28.3 per centand 23.7 per cent, respectively, and lowest in East Asia (9.5 per cent) and South Asia(9.3 per cent). Between 2011 and 2012, regional youth unemployment rates increasedin all regions except in Central and SouthEastern Europe (nonEU) and Commonwealthof Independent States (CIS), Latin America and the Caribbean, and SouthEast Asia andthe Pacific. Encouraging trends of youth unemployment are observed in, for example,

Azerbaijan, Indonesia and the Philippines.


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5

From 2012 to 2018, the youth employmenttopopulation ratio is projected to decreasein all regions except in the Developed Economies and European Union. The largestdecrease is projected in the Asian regions, ranging from 1.1 percentage points in SouthAsia to 2.5 percentage points in East Asia.

In countries and regions with high poverty levels and high shares of vulnerableemployment, the youth employment challenge is as much a problem of pooremployment quality as one of unemployment. For instance, South Asia and SubSaharanAfrica present relatively low regional youth unemployment rates, but this is linked tohigh levels of poverty, which means that working is a necessity for many young people.In India, there is evidence that youth unemployment rates are higher for families withincomes over the US$1.25 poverty rate than for those with incomes under this povertyline.

The NEET rate for young people is high in some developing regions where figures areavailable. For instance, in Latin America and the Caribbean this rate was estimated at19.8 per cent in 2008.

1.3.4 Theskillsmismatchchallenge(Chapter3)

This report examines two types of skills mismatch, using levels of educationalattainment as a proxy for skills. The first type consists of mismatch between the supplyand demand of skills, and is based on a comparison of the educational attainments ofthe employed and the unemployed. The second type concerns mismatch between theskills that young people possess and those required by their jobs.

In advanced economies, the evidence shows there is a higher risk of mismatch for thoseat the bottom of the educational pyramid, which is reflected in relatively highunemployment rates for the lowskilled in comparison with the highskilled. This typeof mismatch increased from 2010 to 2011, signalling a deterioration of the labourmarket position of lowskilled youth.

With respect to the second type of mismatch, the evidence from advanced economiesshows that young people (aged 1529) are far more exposed to overeducation thanworkers aged 30 and above, and are also less likely to be undereducated. Overeducationof youth in advanced economies increased by 1.5 percentage points in the period 2002

to 2010, reflecting in part increases in educational attainment. However, the strongincrease in overeducation in the past two years (by 1.4 percentage points) suggestsanother consequence of the economic crisis: youth with higher levels of education areincreasingly taking up jobs that they are overqualified to do. The growing phenomenonof overeducation therefore implies a crowding out of youth at the bottom of theeducational pyramid. The lesseducated youth find themselves at the back of the queueeven for those jobs for which they are best qualified. Apart from youth, labour marketgroups that often face an elevated mismatch risk include women, the disabled andmigrants.


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1.3.5 School-to-worktransitionsurveys(Chapters4and5)

Labour markets for young people in developing economies are very different from thosein developed economies. The irregular nature of employment among youth and thetendency for youth to leave education early in developing economies are the labour

market characteristics that contrast most directly with those of youth in developedeconomies. Compared with advanced economies, these countries face the additionalchallenges of underemployment and working poverty, with young people making up thebulk of the workers in the informal economy in both rural and urban areas.

Youth unemployment is a serious issue in lowincome economies. When using a relaxeddefinition of unemployment (where active job search is not a criterion for inclusion),the unemployment rate doubles in many lowincome economies. In fact, when thisdefinition is applied, the average relaxed unemployed rate in leastdevelopedeconomies often comes out even higher than that of the highincome economies.Moreover, the unemployed young people in lowincome economies do not benefit fromthe social protection systems that are available to their counterparts in developedeconomies.

Lowquality employment dominates in the ten developing economies examined inChapter 4. Looking at averages across the ten countries, as many as eight out of tenyoung workers are in informal employment, six out of ten lack a stable employmentcontract and onethird are underqualified for the work that they do, with consequencesfor both the productivity of the enterprise and the security of the workers themselves.The high levels of underutilization of young labour in developing economies are ahindrance to development. As many as 60 per cent of young persons in developing

regions are either without work, not studying or engaged in irregular employment. Inother words, nearly twothirds of youth in developing economies are not achieving theirfull economic potential.

New data presented in Chapter 5 provide a unique portrait of how young people movefrom the end of schooling (or entry to first economic activity) to a stable job oralternatively, remain stuck in categories of economic activity marked by informality,uncertainty and working poverty. In the ten developing countries analysed, youngmales are more likely than young females to complete the transition to stable and/orsatisfactory employment. Household wealth, greater investment in education and urbanorigins are also seen to offer advantages in the labour market transition of youth.Shopping around among labour market experiences is not the norm in developingeconomies. When few labour market opportunities exist, young people tend to stickwith the job that they have, regardless of its quality.

1.3.6 Policiestopromotedecentworkforyouth(Chapter6)

Five key policy areas that can be adapted to national and local circumstances wereidentified by the representatives of governments, employers and workers of the 185ILO Member States at the International Labour Conference (ILC) in June 2012 and are


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included in the Resolution The youth employment crisis: A call for action.3 The policyareas include: i) employment and economic policies to increase aggregate demand andimprove access to finance; ii) education and training to ease the schooltoworktransition and to prevent labour market mismatches; iii) labour market policies totarget employment of disadvantaged youth; iv) entrepreneurship and selfemployment

to assist potential young entrepreneurs; and v) labour rights that are based oninternational labour standards to ensure that young people receive equal treatment.These main policy areas and examples of good practices with details on specificinterventions are discussed in Chapter 6 in view of the analysis in this report and thediscussions in meetings such as the G20 Summits (see box 1).

Box1.Youthemployment:AG20priority

The alarming situation of young people in the labour markets of most G20 countries has been

the subject of the discussion and deliberations of the G20 Summits. At the London Summit onGrowth, Stability and Jobs (April 2009), the Leaders adopted a Global Plan for Recovery and

Reform and committed to support those affected by the crisis by creating employment

opportunities. They also called upon the ILO to work with other relevant organizations and to

assess the actions taken and those required for the future. This was followed by the

Pittsburgh Summit where Leaders committed to put quality jobs at the heart of the recovery

process, decided to convene the first Meeting of Labour and Employment Ministers, and

requested the ILO to prepare the G20 Training Strategy (see box 10).

The second Meeting of Labour and Employment Ministers (Paris, September 2011) discussed

the main youth employment challenges in G20 countries and highlighted the role of policies toincrease both quantity and quality of jobs for young people (OECD and ILO, 2011). The

Ministers policy recommendations were endorsed by the Leaders in Cannes (November

2011). These revolved around improving active employment policies particularly for young

people and other vulnerable groups establishing social protection floors, promoting

international labour standards and strengthening the coherence of economic and social

policies. The Summit also established an Employment Task Force, with an immediate priority

for 2012 of youth employment.

The Employment Task Force was convened under the Mexican Presidency with a request for

support from the ILO and other partners in reviewing youth employment policies andprogrammes, particularly apprenticeships and other measures to ease the schooltowork

transition. The main conclusions of the Employment Task Force on the strategies for youth

employment in G20 countries were endorsed by the Ministers of Labour and Employment

(Guadalajara, May 2012) and by the Leaders Summit (Los Cabos, June 2012). Conclusions

include (i) strengthening quality apprenticeship systems and other schooltowork transition

programmes in collaboration with the social partners; (ii) providing career guidance and

facilitating acquisition of workexperience with a view to promoting decent work; (iii)

3 The full text of the 2012 Resolution The youth employment crisis: A call for action can be found on

the ILO website at http://www.ilo.org/ilc/ILCSessions/101stSession/texts

adopted/WCMS_185950/langen/index.htm.


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supporting the provision of youth entrepreneurship measures; (iv) exploring voluntary

technical cooperation programmes, bilaterally or together with international organizations, as

a means to share best practices in addressing youth employment; (v) requesting the ILO,

OECD and other international organizations to work with national institutions in order to

better understand the situation of young people in G20 countries and implement national

youth employment initiatives with the support of the social partners. The Leaders extended

the mandate of the Employment Task Force for another year under the Russian Presidency.

The social partners have actively contributed to the G20 priority on youth employment. The

Business organizations (B20) and the Trade Union organizations (L20) of the G20 countries

urged the Leaders to address the employment situation in general and of young people in

particular in order to prevent the risk of a growing share of the population losing faith in the

global economy. They also drew the attention of the Leaders in Cannes to the key elements

that could make nationallydefined social protection floors relevant in all countries, the need of

implementing fundamental principles and rights at work, and the importance of promoting

coherence of actions in the multilateral system.

Young peoples concerns about the lack of decent jobs for them and their peers were voiced by

representatives of young people selected by each country of the G20. In May 2012 the

representatives of young people met at the Y20 Summit (Puebla, Mexico) and developed a set

of conclusions to call the attention of G20 leaders to global priorities (including global stability

and financial inclusion, international trade, sustainable development and green growth, food

security and the future of the G20). A specific set of conclusions revolved around the creation

of quality jobs for young people.

Source: Based on information posted on ILOs G20 website, www.ilo.org/g20.

summary en - global employment trends for youth 2013 - a generation at risk

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